1. Topper Toys has developed a new toy called the Brainbuster. The company has a standard cost system to help control costs and has established the following standards for the Brainbuster toy:
Direct materials: 8 pieces per toy at $0.30 per piece
Direct labor: 1.2 hours per toy at $7 per hour
During the month of August, the company produced 5,000 Brainbuster toys. Production data for the month on the toy follow:
Direct materials: 50,000 pieces were purchased for use in production at a cost of $0.28 per piece.
Direct labor: 6,400 direct labor hours were worked at a cost of $48,000.
Required:
1. Compute the following variances for the month
a. Direct materials price and quantity variances.
b. Direct labor price and quantity variances.